Industry News
Enova Originated $400M in Small Business Loans in Q2
August 3, 2021
Enova, the international lending firm that owns the OnDeck brand, reported Q2 small business loan originations of $400M. That brings the year-to-date figure to $722M, approximately half of the volume OnDeck was producing prior to Covid. (OnDeck’s 2019 originations were $2.475B)
“OnDeck’s performance continues to exceed our expectations,” said Enova CEO David Fisher during the quarterly earnings call, “and we will easily exceed our forecast of $50 million of annual cost synergies, primarily from eliminated duplicative resources, as well as $15 million in run rate net revenue synergies.”
Cash has also come pouring in.
“…While we originally thought that OnDeck’s legacy portfolio would have very little value, we now expect to receive over $220 million of total cash from the acquired portfolio, net of securitization repayments,” Fisher said. “In fact, we’ve already realized over $100 million from the legacy portfolio.”
Although ISOs (aka brokers) will remain an important part of driving OnDeck’s growth, Enova is happy that OnDeck brings more to the table.
“The good news about OnDeck, is at least they had a direct channel and a pretty good direct channel because of their terrific brand on the small business side, where our small business products had no direct channel,” Fisher said. “It was all through ISOs. So, we gain that capability through OnDeck.”
Enova reported $80M in net income for the quarter on $265M in revenue.
Funder Acquires Automated Underwriting Startup for Post Pandemic Market
July 6, 2021
In an age of changeups, the talent or tech a firm acquires has increasingly become what sets them apart from the pack.
Yes Lender, a funder based in Pennsylvania, recently teamed up with MCA AI underwriting startup Edge Funder. Yes bought Edge and will bring co-founders Amotz Segal and Kobi Ben Meir to the team as Vice President of Business Development and Chief Marketing Officer.
Segal, an industry vet with a decade of experience in MCA, said it was a great time to join forces and grow.
“[Yes Lender] weathered this pandemic in a pretty impressive way, I would say,” Segal said. “What they see now is an opportunity to take advantage of the post-pandemic market and the need for a more sophisticated data driven system to improve their chances to become one of the biggest names in this industry.”
Surviving the pandemic in style is something Yes Lender and Edge have in common. Back in 2019, Segal left Yalber and started an investment consulting firm. By May 2020, the pandemic had soured business, but he and his co-founder Ben-Meir saw an opportunity.
“During the pandemic, I realized fairly quickly that many of the MCA companies are going to go out of business because of the nature of the shutdown,” Segal said. “So I decided to take the opportunity and apply my experience, knowledge, and start my own platform.”
The idea was simple, he said: create something that would address the pain points of the industry. They worked with the concept of building a platform that treated business owners just as consumers are treated in consumer finance. They began generating leads directly from SMBs like a consumer funding product, though Segal said they would always be focused on working with ISOs as well.
Next, they focused on turning the application process into a seamless, automated process. While the MCA industry can fund in 24 or 48 hours, the consumer credit world still has it beat, with card applications processed in as little as 30 seconds. That is the target time for online MCA applications, Segal said.
He said they look forward to being a part of the Yes Lender team and executing that vision. Glenn Forman, CEO of Yes Lender, said in a release that the firm is fortunate to have joined forces with Edge.
“Their lead generation and direct-to-merchant funding platform are terrific complements to Yes Lender’s thriving ISO-driven sales channel,” Forman said. “Moreover, the addition of artificial intelligence to our already robust array of data-driven risk assessment tools will further strengthen our underwriting.”
Thrasio Acquires Yardline to Offer E-Commerce Funding
June 16, 2021
Amazon merchant conglomerate Thrasio bought Yardline to incorporate e-commerce finance into the product offering. Thrasio has been active with Yardline since the firm’s initial backing of the company, and is now making Yardline a wholly owned subsidiary.
Yardline Chief Revenue Officer Seth Broman said that historically, e-commerce has been risky with no barrier to entry like traditional brick and mortar shops. Broman added that online stores used to be for supplements, but through Amazon’s third-party marketplace and Shopify’s help, scaling a quality business has become possible.
“Through COVID, the script was flipped,” Broman wrote in a statement. “E-commerce businesses became less risky, and brick-and-mortar businesses suffered the most. It’s also a much smaller universe and harder to target than a brick-and-mortar business.”
Thrasio boasts it is the largest acquirer of Amazon brands globally, and co-founder and co-CEO Carlos Cashman said 40% of brands they approach end up selling. Now, they can help scale those brands.
“Yardline will be an asset in creating more opportunities for these entrepreneurs and offering more sophisticated avenues for growth,” Cashman said in a statement. “They’ve been doing something different in the space—their strategic approach to providing embedded capital across e-commerce marketplaces is unique—and we’re eager to have their technology and proficiency on our team.”
Tomo Matsuo, president of Yardline, will be joining Thrasio’s senior leadership team. “It’s conceivable that every eCommerce-related platform will have FinTech capabilities in the future,” he said in a statement. “And our acquisition by Thrasio demonstrates that.”
LendAcademy P2P/Investor Forum is Returning
June 14, 2021The P2P Lending/Investor Forum formerly at LendAcademy.com is coming back!
In late May, the online forum at LendAcademy.com went offline. Soon after, the forum URL was redirected to a note from the company that said the server hosting the data was no longer accessible.
“Upon further investigation it seems that our web hosting company, GC Solutions, has suddenly gone out of business,” they wrote. “We can no longer access our web portal to manage the site. We have left voicemails and emails so far to no avail. We received no warning and were taken completely by surprise. The backups we have are also with the hosting company.”
With the data seemingly permanently lost, deBanked acquired the rights to it last week (just the forum), with the hope that some proprietary methods of forensic recovery would be successful. A significant portion of the forum has since been restored, hosted now at debanked.com/p2pforum.
It is still a work in progress. There are still formatting issues and a number of missing posts. Passwords were also lost. If you were a user on the forum and wish for your account access to be restored, you must email us at info@debanked.com.
Thank you for your patience.
deBanked is affiliated with 3 other forums as well, namely:
deBanked Forums
DailyFunder
Small-Business-Forum.net
The original post announcing the loss:
deBanked Celebrates 4,000 Days Since Inception
June 13, 2021
It’s been 4,000 days since deBanked first came online as a blog, originally as MerchantProcessingResource.com in 2010.
I did not anticipate on Day 1 that I would still be here more than 10 years later, but here I am!
Thanks to everyone that has been reading, watching, following along, and attending our events. It has made the journey thus far very enjoyable.
I look forward to seeing you all again in person at Broker Fair 2021 in New York City.
Balboa Capital Closes $50 Million Corp. Note Financing
June 9, 2021
Equipment financer, SMB, and franchise financier Balboa Capital, closed a $50 million corporate note financing from a “consortium of prominent, U.S.-based institutional investors.” The firm said it plans to use the financing to refinance a portion of corporate debt, and to fund working capital.
“This transaction demonstrates the strength of our business and our investors’ support for our strategy and growth potential in 2021 and beyond,” CFO Heather Parker said. “We are well-positioned as one of the largest independent financing companies in the United States and will continue to play a meaningful role in the nation’s economic recovery by helping small businesses access growth capital.”
Brean Capital, LLC served as Balboa Capital’s Exclusive Advisor and Placement Agent in connection with this transaction.
Last October, the firm secured its seventh equipment asset-backed securitization valued at $201 million. “This is another step toward our key business objectives, which are to increase our financial flexibility, continue our growth, and maintain sufficient capital during any economic condition,” Parker said.
Marqeta Goes Public on The NASDAQ
June 9, 2021
Marqeta went public on the Nasdaq this afternoon, raising $1.2 billion and pricing higher than expectations. The firm priced 45.5 million shares at $27, and prices rose to over $30 a share.
Marqeta sells payment tech designed to detect fraud by issuing physical cards to independent contractor firms like DoorDash and Instacart. Contractors use Marqeta cards at point-of-sale in restaurants and supermarkets. Marqeta also enables Square’s Cash App debit card and Buy Now Pay Later fintech firms Affirm and Klarna to move money.
The firm applied for a public offering on May 15th, posting an annualized first quarter 2021 revenue growth of 123% to $108 million and a 2020 annual revenue that had doubled to $290.3 million.
Forward Financing Gets $250M to Grow
June 4, 2021
Forward Financing announced a $250 million credit facility from one of their current capital providers.
“This is a big win for our business and a testament to our strong financial performance throughout this difficult past year,” said Eugene Wong, Vice President of Strategy and Finance. “The increased facility gives us the flexible capital we need to grow and expand so that we can support the small business economy as it recovers on the other side of the COVID pandemic.”
Forward said it reported growing 60% in the past six months and expected to double the employee headcount in the coming year. The numbers back this up: the firm originated a total of $165,826,203 across 6,142 advances in 2020, a representative said. Forward reached a total of $1B in funding as of March 2021 since the firm was founded in 2012.
